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Gold not only regained its luster in March but has been on a blistering rally on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and central bank buying. The bullion logged its biggest monthly rise in more than three years in March, rising 8.5%. It continued its bull run to start the second quarter, soaring to a new high of $2,263.53 per ounce with expectation for further upside in the coming weeks.
In tandem with the higher gold price, ETFs in the gold space have surged. In fact, metal miners are the biggest beneficiaries of the surge in the gold price as these act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market. US Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report) stole the show, climbing 24.4%, followed by gains of 23.1% for Themes Gold Miners ETF (AUMI - Free Report) , 22.8% for iShares MSCI Global Gold Miners ETF (RING - Free Report) , 22.7% for Global X Gold Explorers ETF (GOEX - Free Report) and 22.4% for VanEck Junior Gold Miners ETF (GDXJ - Free Report) .
The Fed is expected to cut rates in June, fueling the gold price higher. This is because gold becomes more appealing when interest rates fall compared to fixed-income assets such as bonds, which would yield weaker returns in a low-interest-rate environment. According to the CME Group's FedWatch Tool, traders are currently pricing in a 69% probability that the Fed would begin cutting rates in June, up from 64% at the start of last Friday (read: ETFs in Focus With Fed Rate Cuts in the Cards).
Gold has been considered a store of wealth for investors. It is often used as a means of preserving wealth during times of financial and political uncertainty and usually does well when other asset classes struggle. As such, factors such as the forthcoming U.S. presidential election, as well as the ongoing Russia-Ukraine war and the Israel-Hamas conflict, enhance gold's attractiveness to investors.
Strong physical buying from the world’s central banks in a bid to diversify reserve portfolios due to geopolitical risks and purchases from investors in Asia have been a pillar of support. In fact, gold demand in China has increased substantially with the nation’s central bank adding substantial volumes of bullion to its reserves, boosting holdings in each of the past 16 months. Further, gold buying has been gaining in popularity among younger Chinese.
Here’s a detailed discussion of the five ETFs mentioned earlier:
US Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report)
US Global GO GOLD and Precious Metal Miners ETF provides investors access to companies engaged in the production of precious metals either through active (mining or production) or passive (owning royalties or production streams) means. It tracks the U.S. Global Go Gold and Precious Metal Miners Index, holding 30 stocks in its basket. Canada takes the lion’s share at 50.6%, followed by Australia (18.1%), the United States (12.9%) and South Africa (12.7%). GOAU has amassed $88.9 million in its asset base and charges 60 bps in fees per year. It trades in a volume of 23,000 shares per day on average (read: 5 Sector ETFs That Beat the Market in March).
Themes Gold Miners ETF seeks to track the Solactive Global Pure Gold Miners Index, which identifies the largest 30 companies by market capitalization that derive their revenues from gold mining. It holds 28 stocks in its basket, with Canadian firms accounting for 50.9%, followed by Australian firms with 28.8% share.
Themes Gold Miners ETF has accumulated $1.4 million in its asset base while trading in an average daily volume of 2,000 shares. It charges 35 bps in fees per year.
iShares MSCI Global Gold Miners ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 36 securities in its portfolio. Canadian firms take more than half of the portfolio, while the United States takes the next spot at 19.6% share. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. It has been able to manage assets worth $432.5 million and trades in a good volume of 100,000 shares per day (read: 5 Popular ETFs to Play the Rally in Gold Price).
Global X Gold Explorers ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It is home to 52 stocks. Canadian firms dominate the fund’s return at 45.9%, followed by Australia (30.8%) and the United States (7.8%).
Global X Gold Explorers ETF is unpopular and illiquid, with AUM of $34.8 million and an average daily volume of 6,000 shares. The expense ratio comes in at 0.65%.
VanEck Vectors Junior Gold Miners ETF offers exposure to small-capitalization companies that are involved primarily in the mining of gold and/or silver and tracks the MVIS Global Junior Gold Miners Index. Holding 95 stocks in its basket, Canadian firms dominate the fund’s portfolio with 52.6%, while Australia (19.1%) and Peru (4.4%) round out the top three.
VanEck Vectors Junior Gold Miners ETF has AUM of $4.5 billion and charges 52 bps in annual fees. It trades in a heavy volume of around 6 million shares a day on average.
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Gold ETFs Outperform in March
Gold not only regained its luster in March but has been on a blistering rally on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and central bank buying. The bullion logged its biggest monthly rise in more than three years in March, rising 8.5%. It continued its bull run to start the second quarter, soaring to a new high of $2,263.53 per ounce with expectation for further upside in the coming weeks.
In tandem with the higher gold price, ETFs in the gold space have surged. In fact, metal miners are the biggest beneficiaries of the surge in the gold price as these act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market. US Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report) stole the show, climbing 24.4%, followed by gains of 23.1% for Themes Gold Miners ETF (AUMI - Free Report) , 22.8% for iShares MSCI Global Gold Miners ETF (RING - Free Report) , 22.7% for Global X Gold Explorers ETF (GOEX - Free Report) and 22.4% for VanEck Junior Gold Miners ETF (GDXJ - Free Report) .
The Fed is expected to cut rates in June, fueling the gold price higher. This is because gold becomes more appealing when interest rates fall compared to fixed-income assets such as bonds, which would yield weaker returns in a low-interest-rate environment. According to the CME Group's FedWatch Tool, traders are currently pricing in a 69% probability that the Fed would begin cutting rates in June, up from 64% at the start of last Friday (read: ETFs in Focus With Fed Rate Cuts in the Cards).
Gold has been considered a store of wealth for investors. It is often used as a means of preserving wealth during times of financial and political uncertainty and usually does well when other asset classes struggle. As such, factors such as the forthcoming U.S. presidential election, as well as the ongoing Russia-Ukraine war and the Israel-Hamas conflict, enhance gold's attractiveness to investors.
Strong physical buying from the world’s central banks in a bid to diversify reserve portfolios due to geopolitical risks and purchases from investors in Asia have been a pillar of support. In fact, gold demand in China has increased substantially with the nation’s central bank adding substantial volumes of bullion to its reserves, boosting holdings in each of the past 16 months. Further, gold buying has been gaining in popularity among younger Chinese.
Here’s a detailed discussion of the five ETFs mentioned earlier:
US Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report)
US Global GO GOLD and Precious Metal Miners ETF provides investors access to companies engaged in the production of precious metals either through active (mining or production) or passive (owning royalties or production streams) means. It tracks the U.S. Global Go Gold and Precious Metal Miners Index, holding 30 stocks in its basket. Canada takes the lion’s share at 50.6%, followed by Australia (18.1%), the United States (12.9%) and South Africa (12.7%). GOAU has amassed $88.9 million in its asset base and charges 60 bps in fees per year. It trades in a volume of 23,000 shares per day on average (read: 5 Sector ETFs That Beat the Market in March).
Themes Gold Miners ETF (AUMI - Free Report)
Themes Gold Miners ETF seeks to track the Solactive Global Pure Gold Miners Index, which identifies the largest 30 companies by market capitalization that derive their revenues from gold mining. It holds 28 stocks in its basket, with Canadian firms accounting for 50.9%, followed by Australian firms with 28.8% share.
Themes Gold Miners ETF has accumulated $1.4 million in its asset base while trading in an average daily volume of 2,000 shares. It charges 35 bps in fees per year.
iShares MSCI Global Gold Miners ETF (RING - Free Report)
iShares MSCI Global Gold Miners ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 36 securities in its portfolio. Canadian firms take more than half of the portfolio, while the United States takes the next spot at 19.6% share. RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. It has been able to manage assets worth $432.5 million and trades in a good volume of 100,000 shares per day (read: 5 Popular ETFs to Play the Rally in Gold Price).
Global X Gold Explorers ETF (GOEX - Free Report)
Global X Gold Explorers ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It is home to 52 stocks. Canadian firms dominate the fund’s return at 45.9%, followed by Australia (30.8%) and the United States (7.8%).
Global X Gold Explorers ETF is unpopular and illiquid, with AUM of $34.8 million and an average daily volume of 6,000 shares. The expense ratio comes in at 0.65%.
VanEck Vectors Junior Gold Miners ETF (GDXJ - Free Report)
VanEck Vectors Junior Gold Miners ETF offers exposure to small-capitalization companies that are involved primarily in the mining of gold and/or silver and tracks the MVIS Global Junior Gold Miners Index. Holding 95 stocks in its basket, Canadian firms dominate the fund’s portfolio with 52.6%, while Australia (19.1%) and Peru (4.4%) round out the top three.
VanEck Vectors Junior Gold Miners ETF has AUM of $4.5 billion and charges 52 bps in annual fees. It trades in a heavy volume of around 6 million shares a day on average.